TopNews

Truckload carrier USA Truck has filed a breach of contract lawsuit against Knight Transportation, claiming Knight used USA Truck's confidential information to begin what it calls a “creeping hostile acquisition” of the Arkansas-based fleet.

The action, filed in the Circuit Court of Crawford County, in Van Buren, Ark., alleges the actions by the Phoenix-based truckload operator, including its purchasing shares of USA Truck stock, using USA Truck's confidential information and its disclosure of prior discussions with USA Truck, are violations of the confidentiality agreement between the parties and have disadvantaged the USA Truck's other stockholders.

The suit further alleges that Knight Transportation's recent public statements indicate it intends to further violate the confidentiality agreement by using confidential information to pursue a takeover of USA Truck without negotiating with its board of directors.

Last month Knight offered to buy USA Truck, offering $9 per share, nearly a 40% premium above its closing price on Sept. 25. The offer was rejected, with the board saying the offer "[did] not reflect the company's full value."

USA Truck's board of directors says it is taking this action “in order to ensure that it can consider a proposed transaction in light of the recent initiatives undertaken by the company's new management team without the threat imposed by Knight Transportation's share acquisitions.”

The lawsuit seeks to require Knight Transportation to divest the shares USA Truck says it acquired in violation of the confidentiality agreement.

In a statement, USA Truck said its “board of directors is very disappointed that Knight is doing exactly what it promised not to do – use confidential information that it was provided in the context of friendly and private discussions regarding a negotiated transaction between the companies to initiate a creeping hostile takeover of USA Truck at a price that does not reflect the full intrinsic value of USA Truck.”

USA Truck reiterated it previously offered to meet with Knight and remains open to all strategic options that reflect the "full intrinsic value of USA Truck, including further discussions with Knight."